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Recalling the global grief 9/11 events stirred is an important reflection on anniversary

On the 10th anniversary of the tragic date we simply remember as 9/11, I shared here a column written a few days after that September day by a former United Press International colleague, Al Webb, who did a wrapup of the global grief being poured out on America's behalf.


Citizens of every country made it clear they shared the pain the U.S. suffered that day and Webb's story, written from his post in London, captured the display of that shared pain in a way that deserved remembering. So far that reason, I share it again now on the 12th anniversary of 9/11.


Events since then, and current ones, might suggest that the world regard that this country enjoyed then was a national treasure that somehow has been dramatically depleted.


As I noted in sharing Webb's piece two years ago, reflecting on that global sharing of grief stirs the question of whether any similar outpouring would occur today. If not, why not? And perhaps that's the compelling question that deserves reflection on this anniversary of 9/11. 



By Al Webb

LONDON (UPI) -- A small girl with a Cockney accent shyly waved a tiny American flag, and a queen brushed away a tear. In a Scottish town that has known its own tragedy, a lone church bell tolled. On a German river, foghorns sounded a low moan.


Across countries and continents waves of sympathy for a nation in anguish rolled on. A young woman in a Kenyan park wept over the sad headlines in newspapers spread on the ground. A one-time terrorist donated blood for the victims. Hundreds stood in line in cities from Dublin to Moscow to sign books of condolences. 


And over the outpouring of grief and mourning for the lives lost in the boiling flames and rubble of the World Trade Center towers and a wing of the Pentagon, time and again came the strains of "The Star-Spangled Banner," sometimes in places where it had never been sung before.


In a gesture reminiscent of John F. Kennedy's "Ich bin ein Berliner," symbolizing his solidarity with another troubled people four decades ago, the Paris newspaper Le Monde perhaps summed it up best: "We are all Americans."


In London, where the little girl with the funny accent and her American flag pressed her damp face against the gates, the band performing the traditional Changing of the Guard at Buckingham Palace suddenly did something it had never done before -- it struck up "The Star-Spangled Banner."


For 45 minutes, the Mall in front of the palace became a little piece of America for hundreds of its citizens who were there because there were no planes to take them home. And the band of the Coldstream Guards played on.


As tear-stained faces lifted and sang along, as Americans and British and other nationals waved Old Glory, the marches rolled -- "The Liberty Bell" after the national anthem, followed by "The Washington Post Marchand "Semper Fidelis" and finally, heart-rendingly, "When Johnny Comes Marching Home."


What the Coldstream Guards had triggered was the greatest mass demonstration of grief in Britain since Princess Diana was killed in a car crash four years ago. And as with Diana's death, a carpet of flowers, children's toys, poems, letters, all illuminated by tiny candles, built up this time at the fortress-like U.S. Embassy in London.


Amid the hundreds of bouquets, a single American flag was wrapped around a tree. One woman pressed her tear-dampened lips to its fringe in a soft kiss. 


The sweeping tide of mourning reached its crescendo at 11 o'clock Friday morning when Britain, France, Germany and scores of other countries in Europe, Africa and Asia went silent for three minutes, in honor of the innocent dead in America.


In Paris, the elevator at the Eiffel Tower stopped halfway to the top. Buses, trams and cars halted in their tracks across the continent.


In Spain, more than 650 city and town halls became gathering centers for tens of thousands who bent their heads in silent prayer -- and then, at the end of the three minutes, they lifted their eyes and applauded in that people's traditional tribute to the victims of terrorism.


On the River Elbe leading into Hamburg, ships flew their flags at half-mast. The minutes of silence crept by -- and at the end were broken by the sound of a thousand foghorns rolling across the water into the city's very heart.


In Lockerbie, Scotland, there was no applause, no singing, no bands, only the ringing of a single church bell and the flutter of flags at half-mast. This is a town with singular links to America, forged in a terrorist attack in the skies 13 years ago.


In all, according to an estimate by The Daily Telegraph newspaper in London, some 800 million people across Europe joined in the three minutes of silence.


At Berlin's Brandenburg Gate, once part of a dividing line between freedom and tyranny, a crowd of some 200,000 -- among them Germans whose relatives had died in terrorist attacks -- gathered beneath a black banner bearing the words, "We Mourn With You."

In Paris, crowds jammed the Place de la Concorde, itself a symbol of reconciliation, while church bells rang for five minutes before the silence.


In the government's Elysee Palace, "The Star-Spangled Banner" rang out, while over the French air waves, radio stations played John Lennon's "Imagine."


The bankers of Switzerland are not noted for their sentimentality,so they dealt in their own currency. At the end of the three minutes of silence, they announced they were donating more than $500,000 to the families of the victims of the atrocities in America. 


Lloyd's of London, the insurance market based in the British capital and one of several insurers of the World Trade Center, rang its Lutine bell and observed a minute of silence in memory of the dead in America -- some of them in the several broker offices Lloyd's has -- had -- in the WTC.


In Belfast, the bullets and bombs of Northern Ireland's own form of terrorism, known as sectarian violence, went silent as tens of thousands from both sides of the divide -- Roman Catholic and Protestant - gathered in front of a makeshift stage at City Hall, to stand in silent tribute.


It is a city that knows the heartache of terrorism. "We have suffered for 33 years," said Betty McLearon. "People here have to be admired for the way they cancope with it. It will take the people in New York a long time to get over this."


In Moscow, the Russians observed a minute's silence as they laid wreaths and floral tributes outside the U.S. Embassy, once a symbol of the Cold War. Thousands of Muscovites lined up patiently to sign books of condolences.


In turbulent Israel, a nurse gently inserted a needle into the right arm of Yasser Arafat, himself a one-time terrorist who is now head of the Palestinian Authority. In a demonstration of support, he was donating blood to help the American injured.


Back in London, the minutes of silence were followed by a service of remembrance in the capital's majestic St. Paul's Cathedral, led by Queen Elizabeth II herself. In the audience of 2,400 inside, Americans hoisted the Stars and Stripes for the rest of the world to see via television.


Outside the cathedral, the tens of thousands who could not get in waved their own tiny flags and listened over the loudspeakers that carried the words and music for blocks around.  The cathedral's huge organ rumbled into life, to open the service, appropriately, with the American national anthem.


Then something happened that has never happened before, certainly not in public and doubtless not even in private. Softly, the queen began to sing "The Star-Spangled Banner."


Now, the British monarch does not "sing" national anthems. When they are played, she never even opens her mouth. Until now.


 But Queen Elizabeth sang it all, this song whose words were written 187 years ago during Britain's last war with her lost American colonies, through the final words, "O'er the land of the free, and the home of the brave." With the last note, the queengently brushed away a tear. 

That said it all.

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City of Hope's Biller Center underpins grants to bring 'humanistic side' to healthcare

In a healthcare world where breaking down traditional silos will be a key part of addressing the challenge of change that lies ahead, the hands-on philanthropy of a Seattle couple in their involvement with City of Hope has been the underpinning of two grants to provide training on the humanistic side of medicine.


The grants, both $1.5 million for five years, are from the National Cancer Institute to City of Hope, a nationally regarded cancer research and treatment facility in Duarte, east of Los Angeles, and are designed to train representatives from cancer centers around the country. By seeking involvement in the programs, the institutions have indicated they wish to change, and want to understand how to go about it.


Matt Loscalzo, executive director of the department of supportive care medicine at City of Hope, helped create the models for both the breaking-down-silos grant and one for a tablet-based program to train health professionals in how to screen cancer patients for issues that might affect their care.


He credits City of Hope's Sheri & Les Biller Patient and Family Resource Center, supported with both dollars and direct involvement by the couple who transplanted from Los Angeles to Seattle several years ago, with attracting the attention of NCI to the grant applications.


"We would not have gotten these grants, at a time when very few grants are being funded, without the philanthropic and institutional partnership that exists between CoH and the Billers, who are veryactively involved in the operations of the Center," Loscalzo said. "Most institutions say to philanthropists, 'we're pleased to get your money, now please leave us alone.' It doesn't happen that way with CoH and the Billers."


City of Hope bills the center, which in October is celebrating the fifth anniversary of its opening, as "the international model for compassionate care" and touts CoH itself as "one of the only institutions in the United States to offer this level of comprehensive support."


The grant that is likely most exciting to Loscalzo, whom I met at City of Hope two years ago in an introduction by Sheri Biller, is the one to train representative teams from other cancer-care institutions in the use of the tablet, a device named theSupportScreen. He pioneered the device that has become a vital part of the compassionate care that is the key to the Biller Center's success.


Loscalzo says the SupportScreen, a "primitive prototype" of which he brought to City of Hope when he came there from UC-San Diego in 2007, is used to identify physical symptoms, psychosocial problems, family concerns and triages the patient's concerns to the designated professionals or resources."


The SupportScreen prompts patients to answer various questions regarding their care and concerns and researchers have found that patients are frequently more likely to share fears and concernswhen prompted by a computer application rather than by face-to-face personal questions.


Although the Billers have moved to Seattle, where Les has become chairman of Sterling Bank, they remain closely involved with City of Hope, where Sheri is chair of the board.


The purpose of both grants is to, as Loscalzo puts it, "transform the humanistic side of medicine, a recognition that innovative approaches that are patient and family centered represent an idea whose time is coming, real soon. And the rest will come later."


While both grants are focused on cancer care, Loscalzo suggests "they are models for dealing with other chronic diseases."


Evidence of the interest the silos-breakdown concept is having with healthcare facilities around the country is that the next session, to be held in October at Mt Sinai Hospital in New York, which is City of Hope's partner in the grants, attracted more than 200 applicants for the 50 spots. City of Hope and Mt. Sinai will rotate in conducting the semi-annual programs.


The grants will entail training teams of health care professionals: physicians, nurses, social workers, psychologists, business administrators and chaplains who, when they return to their respective institutions, will be expected to begin a process of changing the cultures there.


The institutions that have sent representatives to the sessions have agreed in advance that they want agents of change trained in how to do that, and the programs involve regular followups with the attendees to track their progress and assist with challenges in leading the change process.


And the breadth and extent of interest by cancer centers around the country should be taken as a positive sign that they understand the need to change.

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Those concerned about Bezos' plans for Washington Post might look to Orange County

In the several weeks since Amazon founder and CEO Jeff Bezos stunned the media world, and beyond, with his purchase of the fabled but flagging Washington Post for $250 million cash, I've been asked enough times by friends and business associates for my thoughts as a journalist that I decided to share them in a Flynn's Harp.


I might have been concerned by Bezos' purchase of the Post and the equally surprising, though on a lesser stage, purchase of the Boston Globe by Boston Red Sox owner John Henry, except for what has happened in Orange County with the purchase a year ago of the Register, the area's major daily newspaper.


The newspaper was purchased last July by Aaron Kushner, a 40 year old former CEO of a greeting card company, and his partners, including Eric Spitz, a top executive of companies in various industries, including a last pre-Register stop to help revive a classic brewing brand as CFO at Narragansett Brewing Co.


Inthe 13 months since then, the editorial staff has almost doubled, from 200 to 350, and the print newspaper is filled with news, and increasingly with ads.


While over the past year the Register's average print circulation has declined slightly to just under 160,000, the average weekly print circulation of Freedom's 26 weekly community newspapers, two of which have been converted to five-day operation, has nearly doubled to more than 180,000.


Kushner came in musing "why would anyone make some customers pay while others were getting the same thing for free?" So quickly came a pay wall for web visits and it's now a $1 a day for subscribers, whether they get their news online or in print.


And he and Spitz, who oversees daily operations at the Register as president of Orange County Register Communications, have filled the newspaper with editorial stuff, including the addition of 22 weekly sections, and it's become a place where most reporters in the country would happily take a job


After Bezos' and Henry's purchases I sent Kushner an email saying I had originally thought he was a media aberration, but now think of him and his partner as the leaders of a trend for the future of newspapers.


What's the trend? That people with significant financial resources and business acumen, and committed to public service and giving back, will decide that new ideas could revive an industry that was challenged but not comatose. After all, a lot of weekly and small-daily newspapers were doing quite well.


Will there be those who buy newspapers for the wrong reasons and abuse the power of the press? Perhaps. Maybe even in the mold of William Randolph Hearst who prided himself on deciding that the U.S. needed to go to war with Spain over Cuba and helped bring the war about with the editorial influence of his newspapers in major cities across the country. Who of the new breed could abuse their new-found power and influence more than the newspaper titans of the past?


But there are also positive "outsider" examples from the past, as with the two Kansas City entrepreneurs who, with no newspaper background, decided a local business newspaper was needed to create a more positive attitude about business. To their surprise, they found that their Kansas City Business Journal also was a profit center if they let the editors simply cover the business news honestly and without interference from them. So they opened business journals in a network of cities and created American City Business Journals.


Spitz, in a piece last week in the Wall Street Journal, closed with this: "Perhaps the industry's new leaders will have innovative ideas that will make it strong again, or maybe they'll discover that the business isn't as broken as everyone thinks and that readers are actually willing to pay for news that matters to their daily lives.


"I'd guess that we all got into this business for the same basic reason. We share a common belief that newspapers matter to our society and unite the communities we serve. Sometimes people buy companies because they want to do some good. Thomas Jefferson said 'an informed citizenry is at the heart of a dynamic democracy.' I think he was right."


The history of the Register, in fact, offers a profound irony for the apprehensions of the media establishment about what Bezos might have in mind for possibly bringing his viewpoint to the newspaper that covers, and presumably influences, Congress and presidents.


Santa Ana was the headquarters and the Register the flagship of a media chain named Freedom Newspapers, whose far-flung holdings were guided by the Hoiles Family, who sought to bring a libertarian viewpoint to the communities served by their newspapers.


As a young man working for United Press International, I had the opportunity in the early '70s to visit occasionally with Clarence Hoiles, the elderly publisher of what was then simply The Santa Ana Register and the overseer of the family's newspaper empire.


Clarence, one of the most gentlemanly, actually courtly, newspaper executives I dealt with, was the son of founder R C. Hoiles, who was once described by Time magazine as "the weird uncle Harold of the newspaper industry" for his views of how newspapers should operate, and seek to influence.


Both father and son wore on their sleeve the Libertarian philosophy that their newspapers were expected to evidence. That extended to the now-fabled requirement that when public schools were mentioned in the articles that were to appear in the newspapers, that phrase had to be changed to "government schools" (meaning they were tax supported) before the stories could be published in a Freedom newspaper.

Bezos has no such journalistic skeletons in the closet of the Washington Post so his actions will be viewed against the backdrop of a respected line of predecessors. But the key step that will be watched most closely should be his ability to return the Post to a path to profitability.

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Life-long fan Mikal Thomsen pleased with how his Tacoma Rainiers' ownership has evolved

 Mikal Thomsen's Tacoma Rainiers will miss the Pacific Coast League playoffs this year and are among the lowest in attendance of the 16 clubs in professional baseball's most far flung conference. But winding up his third season as leader of the ownership team, Thomsen enthuses that "things have turned out great."


The guy who attended his first Tacoma baseball game with his dad in 1960 at the age of three to watch the triple-A team then called the Giants and grew up rooting for his hometown team, which went through many nicknames, now finds himself living "a dream come true" as part owner of the triple-A team.


Mikal Thomsen
Mikal Thomsen

More than just a "part owner," it was Thomsen who convinced his business partner at Trilogy Partnerships, John Stanton, to join the ownership team he was putting together to buy the Tacoma PCL franchise prior to the 2011 season.


No less a baseball fan than Thomsen, Stanton was already part of the Seattle Mariners' ownership team and a year earlier had convinced Thomsen to partner with him in the purchase of the Walla Walla Sweets, a West Coast League expansion in a league for college players just below professional ball.


And although Thomsen's regular business card denotes his role as a managing partner in the wireless venture and investment firm populated by icons of the growth of the wireless industry, he prefers to pass out the card identifying himself as the CEO of the Baseball Club of Tacoma.


Tacoma's population of just over 200,000 makes it the smallest market in the league at about 40 percent the size of the largest PCL markets and its attendance this year that will wind up at about 270,000 is just over half of the nearly 500,000 of the Sacramento River Cats.


But despite the challenges to financial success, including being the AAA franchise closest to a major league city (close enough to lose some fans every game who opt to head north to watch the Mariners) with two years of learning under his belt, Thomsen says things have fallen into place in this third season.


"The first year was a learning experience and I felt a little like a depression-era child waiting for another shoe to drop," Thomsen said. "The second year was mostly positive and this year has been great. We're fully capitalized with 20 partners, new investors, and we've started expanding beyond the baseball model."


"We originally had to put more money in than we anticipated, but we have more than enough money at this point," he said.


"I believe our revenue per fan is higher than most franchises because we do a better job of packaging products together," Thomsen said. "And I believe, though I am somewhat biased, that we offer the best food in our concession stands, the best merchandise in our team store, and the nicest park in minor league baseball."


Thomsen says he's "very happy" with Aaron Artman, the team president retained from previous ownership. "He has been able to add a new head of revenue and a new controller who have helped tremendously on the revenue and cost control sides of the business.  And everyone is working hard to make a visit to the park a lot of fun for the fans."


Thomsen, a businessman even more than a baseball fan, isn't being Pollyannaish in his enthusiasm for the ownership and management teams he has assembled.


Despite its small-market status and lower attendance numbers, Thomsen says Tacoma, which does not release its financials, "is doing better than many of the PCL teams in both revenue andoperating income."


And while success on the field is mostly in the hands of Tacoma's major-league affiliate the Seattle Mariners, the fifth-place finish has added to the fan appeal.


And he said they're realizing that "we have the stadium for 365 days a year and only need it for 72 days for baseball. So we looking for other ways we can add to our revenue by adding to our use of the stadium and doing other things with our resources."


"We need to find other things we can do with the ballpark and there's not really much of a model out there," he added. "We have to start looking at the things we do that groups would pay for, like using our groundskeepers to work with parks or schools."


"A couple of things that have really developed well this year are merchandising sales out of our team store, where we're making significantly more money this year, and concessions, which we contracted with Ivar's for this year after two years of misfires," he said. "They're doing a great job for us."


That first game with his dad was actually the first Triple-A game in Tacoma since the original Tacoma Tigers departed for Sacramento 55 years earlier.


So one idea that Thomsen shared when I interviewed him for a column two years ago was that he might restore the Tigers nickname. With that in mind, the team had fans sporting Tiger hats at some games, as well as hats with the other nicknames the team has had, including Cubs, Twins, Tugs, Yankees and Tigers until the Rainiers nickname in 1995 stuck.


But he says now that the new-name idea quickly went by the wayside as a survey of fans indicated "they love the Rainiers."


Noting that the Giants' hat was the only one his dad ever wore and recalling the growing-up days watching the team, Thomsen says: "I only wish my Dad, who was a big baseball fan and passed that attribute on to all three of his kids, could have been around to see the new ballpark. He would have gotten a big kick out of it."


And likely as well out of the fact that his son now owns the team.

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Eliassen, epitome of "entrepreneurial encore," and 'last of a breed," leaves Red Lion Hotels

Jon E. Eliassen, who has epitomized the phrase "entrepreneurial encore" since his first "retirement" a decade ago, may actually be moving closer to real retirement, at the age of 66, as he steps down from the role of president and CEO of Red Lion Hotels Corp.


In one respect, his retirement from the helm of the Spokane-based hotel company ends a dual role that made him the last of a vanishing CEO breed, those who chair the board of one publicly traded company while serving as CEO of another.

Jon Eliassen
Jon Eliassen


Thus while Eliassen is leaving the top-executive post at Red Lion, which he has held since January, 2010, he will remain as chair of the board of Itron Inc., the $2.2 billion global energy-management and technology company based in Liberty Lake, east of Spokane.


Eliassen's retirement, announced last week, took effect Monday and he will leave the Red Lion board at the end of September.


His focus on a strategy of converting Red Lion from a hotel company that owned buildings into one that relied on franchising properties has been largely successful as half of the company's 52 hotels in 10 western states and British Columbia are now franchises and lesser owned hotels have been sold.


But the past year has been a difficult one for Eliassen and his board as efforts to find a suitor for the company proved unsuccessful and criticisms from two investor groups, who together own about 33 percent of the company created and long controlled by the Barbieri family, mounted. Donald Barbieri, CEO of Red Lion during its growth and expansion years before he turned over the reins in 2006 while remaining as board chair, retired from the board last December.


Four new board members were added last year, including James P. Evans, former head of Best Western International, who will serve as interim president and CEO while the board searches for a permanent new leader.


But if the role at Red Lion brought its likely frustrations, the board-chair post at Itron, which he helped birth as a start-up subsidiary of the old Washington Water Power Co., now Avista Corp., in the later half of the 1980s, has brought offsetting satisfactions.


In a column I did on Eliassen when he assumed his role at Red Lion, he made clear that he didn't want to be credited with being responsible for Itron's successful growth from its early days as a remote meter-reading business. Others, however, would say he clearly played a dramatic role in Itron's growth as the CFO at WWP-Avista for 16 years.


But he conceded he's had fun watching what he referred to as "a great run" for Itron into its role as a world leader in providing electricity, heat, water and gas metering devices.


Eliassen's first "retirement" came in 2003 when he departed his role as CFO and senior vice president at Avista, capping a 33-year career with the investor-owned utility. But he quickly­ was coaxed into taking over the Spokane Area Economic Development Council as its CEO.


He remained as CEO of the Spokane EDC until 2007 when he helped put together a merger of the EDC with the Spokane Chamber of Commerce to create Greater Spokane Inc.


That retirement lasted for a couple of years until 2010 when the Red Lion board, on which he had served since his retirement from Avista, picked him to be president and CEO at a time of transition and challenge for the hotel company.


When I asked him this week what lies ahead, he said "I'm not planning to do anything beyond being involved as a director or in an advisory role."


But the board work extends beyond Itron, since he is a board member of ITLifeline, a privately held business continuity anddisaster-recovery company down the road from Itron in Libetry Lake. And he is the principal of Terrapin Capital Group, LLC.

And while he says he remains "engaged with trends and the continued evolution of energy and water."

And because of what Spokane venture capitalist Tom Simpson has described as "an unselfish desire to fuel economic growth in Spokane," none would surprised if Eliassen were to find a future

summons too interesting to pass up.


As to the dual role in which he was the last of what I described as "a vanishing CEO breed," until a year ago he had shared that unique role with Bill Ayer, president and CEO of Alaska Air Group as well as being board chairman at Puget Sound Energy. But Ayer retired from Alaska in early 2012.


The reason he's likely the last of a breed is because of the growing aversion of boards to having their CEOs involved in a significant way with the business of another company, with those schooled in board activity noting that directors are increasingly saying, basically, "we want our CEO to be focused on our company."

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Architect of Kittitas fire protection plan brings intriguing background to 'Firewise' initiative

Fires raging in Chelan and Klickitat counties have dimmed the memory of last August's disastrous Taylor Bridge Fire that scorched nearly 24,000 acres and consumed 63 homes and buildings in Kittitas County.


But the huge Colockum Tarps fire southwest of Wenatchee and the Mile Marker 28 fire near Satus Pass have given added emphasis to the importance of the fire-protection efforts that have gone on this summer, particularly in Kittitas County in the wake of Taylor Bridge. And those efforts helped make Washington perhaps the nation's most active state for involvement of communities in the nation's "Firewise" program.


The major fires this week in Chelan and Klickitat counties that have burned acreage exceeding the Taylor Bridge Fire represent an exclamation mark for the fact that the danger of fires in the region is bound to continue. And they help provide emphasis for the fact that preparation in the form of fire-protection steps represents the best hope of rural residents to minimize the impact of the blazes.


Suzanne Wade
Suzanne Wade

Suzanne Wade, the local official in Kittitas County responsible for creation, implementation and oversight of the County Fire Protection Plan, finds herself in a role with far different challenges than when she commanded a U.S. Army helicopter company in Europe and, among other duties, trained pilots to do what she wasn't permitted to do -- fly into combat zones.


Women were a tiny percent of Army personnel in the late '80s and early '90s so, as a commanding officer, she was in a then-unusual role for a woman, although she had two women among the 40 pilots under her command.


Near the end of her nine years in the army, she was sent to Alabama where she spent three years as a public affairs officer, flying "high-level people, including congressmen and generals," to appointments in her area, and training them "on how to talk to the press."


"No matter who was in the helicopter, even a general, as the pilot I outranked them," she said.


It takes a far different approach to accomplish her goals as the Kittitas County Conservation District's officer responsible for overseeing implementation of the Fire Protection Plan that she basically created five years ago.


"In my army life I was a company commander responsible not only for the flight students, but all the pilots that were under my 

command," Wade explained. "In this job I pretty much work autonomously and deal almost exclusively with individual landowners in a completely non regulatory manner-just those who want my help."


"We started putting the fire protection plan in place when DNR (the state Department of Natural Resources) asked us to write a countywide fire protection plan, which we had to have if Kittitas County was to be eligible for many of the grants that were becoming available," she recalls.


Meetings with the fire chiefs of various volunteer districts, state officials and the then-acting State Fire Marshall followed before completion of the plan, which she organized, wrote, created the maps for various areas and began meeting with rural residents interested in taking steps to protect their property.


She also created the district's website, explaining: "We didn't have one so I learned how to make one. I'm pretty proud of it so check it out (kccd.net)," she told me.


Sarah Foster, the DNR official who manages the Firewise programs across the state and works closely with Wade and her counterparts around the state, says the program in this state now encompasses 110 communities, mostly in the heavily forested four counties that border the Cascades.


Foster, who also manages DNR's urban and community forester programs, notes that the number of communities in this state involved in the Firewise program represents more than 10 percent of the total of 960 communities nationally, with Washington second only to Arkansas in the number of "Firewise" communities.


For comparison, Oregon has 40 "Firewise" communities, and California just under 70, she adds.


The Firewise program was created in 2001, a year before Wade joined the Kittitas conservation district, when the U.S. Forest Service and Department of Interior joined with the National Association of Foresters to put together the strategy for teaching residents about wildfire and how smart practices around their homes could reduce the risk of fire loss of residences. They coined the term "Firewise" and federal funds were made available for the program.


The official who helped make this state the leader of the program in the West is Matt Eberlein, now with DNR, who was a field forester in 2001when the program was launched nationally.


"We got on board and ran with it," he recalls. The focus was the counties on the eastern slope of the Cascades, where what he describes as "a lot of interest" was evidenced by property owners, but also "some resistance."


"I met with people one on one across the region and often dealt with resistance," said Eberlein, "with the big one being 'I like this property in its natural state,' to which I'd reply 'you own this beautiful piece of land, are you sure you don't want to do what you can to keep it from being burned in a fire.'"


The program involves removal of brush and undergrowth and thinning of smaller trees on portions of the property nearest to the homes of those participating in each of the projects.


"We've basically run out of funding this year because of all the extra interest since the fire last year, but I've still got some grants in and hoping we'll get some," said Wade, adding that the program spent $500,000 last year compared with $20,000 three years ago as it was getting under way. "But I'm spending whatever moneyanyone gives me," she said.


Fire ecologists have warned for years that the danger of wildfire is too high, due to decades of fire suppression, years of ill-conceived timber harvesting and a dramatic increase in the number of people living in forested areas.


The DNR's Foster says "a much larger investment is being made now, mostly federal funds often matched with state money," calling the relationship between DNR and the more than a dozen conservation districts in the state "a really positive partnership."



"We're seeing a lot more people getting interested and involved," she said, adding "we've been saying for years that it's not if a fire burns through an area, but when. Now residents of rural areas are listening."

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GOP "mainstream" leaders seek to energize new generation to recreate past successes

The grand old men of Washington State's Grand Old Party, who brought about the closest thing to a Republican Golden Era in their state back in the '60s, are seeking to help attract and energize a new generation of young people to what they tout as the GOP "mainstream."


Their vehicle for renewal is Action for Washington, created in 1968 by Sam Reed and Chris Bayley, then a couple of young newcomers to the Republican political scene, and recreated several years ago by Reed, who retired this year after three terms as Secretary of State.


sam reed
Sam Reed

The organization had its first fund-raising breakfast last week in Bellevue and a group of those young people who have been attracted as "mainstream" (meaning politically moderate) messengers for the future was in evidence, along with Reed, Action for Washington President Alex Hays and Republican party icons Dan Evans and Slade Gorton.


All are aware that the image being created by Republicans nationally on a number of social issues is making it a more daunting task to create a Republican revival in states like Washington, which has grown increasingly "blue" in the past couple of decades.


That's particularly felt by Republican moderates coming off a gubernatorial election in which the positions of the party nationally may have been the biggest contributor to the defeat of GOP gubernatorial candidate Rob McKenna.


"Clearly what is happening nationally is hurting us," Reed conceded. "But the Northwest, both Washington and Oregon, has traditionally been a place where a different breed of Republicans has operated. And we need to renew that image, and begin to find a way to have an impact nationally."


The graduates of the Action for Washington program are seen as a starting point. The young men and women, many recruited from college campuses, are enrolled in a leadership conference that provides weekly exposure for three to four months of discussion in areas like public policy, public relations and other issues that Hays sees leading them, once they're "alumni," to "vitalize the center-right" with their future involvements.


In a sense, the past-and-present leaders envisioning renewal may hope there's a flip side to George Santayana's oft quoted (usually inaccurately) admonition about "those who cannot remember the past are condemned to repeat it." The reverse would be that those who remember the past may be able to help repeat it.


In fact, the events that unfolded in the decade of the '60s that Reed, Evans and Gorton helped bring about may offer lessons for today, and tomorrow. Those include pushback by Republican moderates against the party's more high-visibility conservative wing, legislative coalitions that both Reed and Hays refer to as the ultimate example of political bipartisanship, and possible looming rifts among Democrats, potentially reminiscent of the divisions of the late '60s and early '70s.


All of those were part of the historical background for what happened in Washington in the '60s that believers in a renewed GOP mainstream would like to recreate.


It was in 1963, when an over-reach by Seattle-area Democrats on the issue of public vs. private power drove angry conservative Spokane Democrats who were believers in protecting Spokane-based and investor-owned Washington Water Power Co. into a coalition with Republicans.


The result was Spokane Democratic Rep. Bill (Big Daddy) Day became speaker and Republican Dan Evans became majority leader, setting the stage for his victory a year later in the gubernatorial race in which he ousted Al Rosellini. Young Seattle city councilman A. Ludlow Kramer, a Republican, rode along to victory in the race for Secretary of State, both bucking a Democratic landslide nationally.


It was their victory, and the emergence of young newcomers like Reed, then fresh out of graduate school at WSU where he was president of the campus young republicans, and Bayley, just back from Harvard and destined to be King County prosecutor, that helped push back the growing role of conservatives in Washington State. In those days, the conservative wing of the party, which helped propel Sen. Barry Goldwater to the GOP presidential nomination, was under the banner of the John Birch Society.


Meanwhile, Democrats were being torn by internal struggle over the Vietnam War, with the party's liberal wing in this state so angered that they actively sought to defeat Henry M. Jackson, one of the nation's most powerful and respected Democrats and an avowed Hawk, in the 1970 election.


Part of what helped moderate Republicans to electoral success in the '60s and early '70s, and would be their hope for the future, was what Hays chuckles in referring to as "Washington's rich tradition of ticket splitting," the key to Evans' and Kramer's victories despite the Democratic sweep nationally. That was also true in '68 when Gorton was elected state attorney general and in a series of elections in which Republicans claimed the majority in the state House of Representatives, without the need for a coalition.


Hays, 43, notes that in his "younger years," before he became active in the state Republican organization and with Mainstream Republicans of Washington and president of Action for Washington, he "helped a few of my conservative Democrat friends in their campaigns."


Reed laments that Mainstream Republicans get far less visibility for their stands on issues, such as in favor of Gay rights, pro-choice and pro- immigration reform, than the views of party conservatives, including the Tea Party types.


Reed is particularly proud of recalling that it was while helping guide the original Action for Washington as executive director of the governor's Urban Affairs Council, that he recruited Art Fletcher, a black self-help advocate and member of the Pasco City Council, to be the GOP candidate for lieutenant governor.


Although Fletcher lost to incumbent John Cherberg, he was the first and so far only African-American to be the nominee of either party for a major statewide office.


Both Hays and Reed view the coalition that came about in the State Senate this year when two Democrats, including one-timeRepublican Rodney Toms, driven from the party by battles with conservatives, joined with Republicans to create a majority as "the ultimate example of bipartisan cooperation."


Reed notes that "it's interesting that in both 1963 and this year that a lot of people were skeptical that the coalitions would hold together, but they proved they could work together when the pressure was on."


As to seeing another divisive battle among factions in the Democratic party, Reed and Hays think the growing budgetary impact of public pensions and retirement practices will eventually be seen as a challenge to key liberal causes such as environmental inititives and programs for children and the poor.


"There's no way to maintain support for all the Democratic interest groups with current budget realities, and that will begin to create real divisions in the ranks," said Reed.


How well the old guard's experience with the past helps them recreate something similar for the future will be evidenced as 2014 political campaigns in this state take shape.

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Pettit unveils strategy for future of family owned Merrill Gardens as senior-living industry leader

William (Bill) Pettit, president and COO of Merrill Gardens since he helped launch the company 20 years ago, has kept the family owned business at the leading edge of growth and change in the senior-living industry. Now he has put together a deal that he figures will position the company for growth under new leadership for the next 20 years.


Pettit, once a rising young star in banking before forsaking that industry to help the R.D. Merrill Co. strategize diversifying from its timber-industry roots, last week announced the deal by which Merrill Gardens will sell more than half of its properties for $183 million to provide for major investments in the future.

Bill Pettit
Bill Pettit


Seattle-based Merrill Gardens is selling its equity stake in 38 senior-living projects for $173 million to Health Care REIT, with which Merrill Gardens had put together an $817 million partnership three years ago that Pettit described, at the time, as "the leading edge of a trend" for senior-living companies. Proof of the accuracy of his prediction came as other senior-living companies soon followed the model of te REIT-relationship.


In essence, the Akron-based Health Care REIT is now buying out the 20 percent of the partnership that Merrill Gardens retained in the 2010 deal and is inking an agreement with Ermitus Senior Living, also Seattle based, to manage the portfolio.


Merrill Gardens will receive an additional $10 million from Emeritus as a management termination fee and will retain 26 communities and proceed with what's described by Tana Gall, whom Pettit lured to Merrill Gardens recently from LeisureCare, still another Seattle-based regional retirement-living company, as "big reinvestment plans."


Of those 26, the REIT will continue a relationship with 10, and another 10 are slated to come on line as new communities that will benefit from the "reinvestment" plans.


Part of the lure for Gall was assuming Pettit's title as Merrill Gardens' president, although the 64-year-old Pettit retains the title of president of R.D. Merrill Co.


Pettit went to work for the Merrill Family in 1992 after a series of banking successes that included becoming head of strategic planning for Seafirst Bank at age 31 in 1980 and becoming chief financial officer in 1985 at the age of 36 before joining problem-plagued E. F. Hutton in New York, only to see the 1987 crash "seal its fate."


So he returned to the Puget Sound area as president of Pacific First Financial and two years later helped guide its takeover.


He was invited to join the R.D. Merrill Co. to help what he deferentially refers to as "the family" as the third generation of the business founded in the 1890s by Richard Dwight Merrill as an environmentally friendly timber operation determine its future.


In the end, the Merrill family decided to have fourth-generation Charles Wright III, chairman since then, take over and chart the future.


Pettit recalls that Wright felt the timber heritage was important, but not the direction he wished to take with the company so, with Pettit's assistance, moved to diversify. In 1993, the company acquired its first independent and assisted living facility in Seattle and Pettit became president and COO of both the company and its senior-living business.


Over the following 17 years, leading up to the 2010 deal with Health Care REIT, Merrill Gardens grew to become one of the largest and most respected senior living companies in the country, operating 56 senior housing communities in 10 western and southern states. It won Family Business of the Year honors in Washington State four times.


"The performance of senior housing has provided one of the best real estate investments of the past decade," Pettit says, but adds that "in reality we never made much money on operations, pretty much a breakeven business model there."


But with last week's deal, he expects Merrill Gardens to have the opportunity, over the next 24 months, "to re-engineer and add new-technology tools to the process'' in a manner that will enhance efficiency and thus bring more bottomline profits, including for the new communities coming on line, and thus growth opportunities.


Pettit says he has no plans to retire soon, adding "I expect to be working for the family for another five or six years."

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Unusual partnerships behind national conference on academic efforts to aid at-risk small businesses

A first-ever national gathering of representatives from business schools around the country that have programs to help businesses in "under-served communities" gain a better chance to succeed and create jobs will take place in Seattle next month, the result of an unusual collaboration of a prominent business school and a global financial firm.


The July 10-12 Conference on Business Development in Under-Served Communities, which will draw leaders from 20 universities that have programs aimed at engaging students with businesses in low- and moderate-income communities, is the culmination of a 13-year vision of Michael Verchot, the man responsible for the event.


Phyllis Campbell
Phyllis Campbell

Verchot, director of the Business and Economic Development Center (BEDC) since its 1995 founding at University of Washington's Foster School of Business, hopes the conference will serve to dramatically expand the number of schools supporting programs for businesses in under-served communities.


In the two years since he first met with Phyllis Campbell, the respected Seattle-area banking leader who is vice chairman of the Northwest region for JPMorgan Chase, she and other executives of Chase have not only come to share the vision, but have enhanced, with time, counsel, and dollars, the opportunity for the vision to become reality.


Next month's gathering will also serve as the springboard for a fund-raising initiative, also supported by Campbell and Chase, to create an endowment for the BEDC to become a national center to guide collaboration and information sharing on "best practices" among business schools with such programs. 

Michael Verchot
Michael Verchot


While "under-served communities" might be assumed as synonymous with minority businesses, Verchot says that's not necessarily accurate, adding that urban under-served communities might usually be minority communities, but that non-urban areas might merely be economically challenged. He uses the example of some communities, like Forks, that have been impacted by timber-industry changes.


"By under-served we mean two things: communities where the median household income is 80 percent or less of the regional median household income, and racial,ethnic, gender communities where businesses under perform the national average," Verchot said.

Verchot, one of the earliest architects of academic emphasis on minority business programs, including an annual Minority Business Awards banquet that remains the only such statewide event in the nation, says that he has wanted, since 2000, to build such a national network to aid businesses in under-served communities.


The BEDC will soon to be renamed the Center for Consulting and Business Development and a $10 million fund-raising effort launched to advance Verchot's vision, a goal for which $2 million has already been raised.


The fact that it took a helping hand from some key players to bring about the conference and set the stage for the next step in Verchot's vision may be appropriate counterpoint for the assistance he hopes his center will help bring about for challenged businesses.


The first meeting with Campbell two years ago was arranged by Neil McReynolds, longtime Seattle business leader and a UW alum and founding co-chair of the BEDC, whom Verchot credits with "being instrumental in every stage of our development since our founding."


And Campbell, CEO of the Seattle Foundation and prior to that Washington president of U.S. Bank when she was tapped by JP Morgan Chase CEO Jamie Dimon to guide the bank's Northwest business, credits Cree Zischke, Chase executive for Global Philanthropy, whose region includes both Washington and Arizona, with being "instrumental in understanding the national scalability of the model."


Verchot and McReynolds wanted advice from Campbell on how to fashion an endowment to build upon the BEDC's work in Washington State.


"But we didn't have the horsepower, in terms of staff, nationwide relationships, vision for what this conference could lead to and funding, until we began working with Chase," Verchot said.


The funding Verchot refers to is a $600,000 grant to BEDC to put on the conference, through which Verchot and Chase hope to establish around the country academic centers that will work with small businesses in under-served communities. Support from Zischke and the bank has already helped launch centers on the BEDC model at Washington State University and at Arizona State University and University of Arizona.


"The endowment he was talking about raising for the center wasn't very much so Cree and I told him to raise the bar and think bigger," recalls Campbell, who explained that the $600,000 for the conference is a multiple-year commitment, part of $1.2 million that the Chase Foundation has put behind bringing about Verchot's vision of a national center.


 "Our philosophy is always aligned toward philanthropic pillars and one is how do we work with very small businesses, especially minority businesses, that we want to help ensure get a leg up," added Campbell.


Bill Bradford, who is a former dean of the school of business at UW, will provide a report at the conference on a study he was commissioned by the Kauffman Foundation to produce on what research has been done on minority business over the past decade.


"The goal was to find out what we know about programs that may have beneficially impacted minority owned business and determine whether we still have the same issues facing minority business that we did in the last century, or have we improved over the past 13 years," Bradford said.


Other unusual initiatives by BEDC are also making their way into programs of other schools, including the innovative Business Assistance Program that links student teams with Rotary Business Mentors and alumni advisors to work with local businesses, a program McReynolds spearheaded with Seattle Rotary as past president of the organization.


McReynolds, who also teaches at the business school, calls it "a win-win situation" that not only gives needed help to small businesses but "gives students fresh from the classroom great practical experience" helping small businesses deal with the callenges they face.


The BEDC has now involved other Rotary Clubs, with Bellevue Rotary working with students at Bellevue College and the Vancouver Rotary with WSU-Vancouver students.


Of the Minority Business Awards program, Verchot notes it's "a way of highlighting success and creating role models for other entrepreneurs and our students of color. These companies don't necessarily need help from us so we use them as examples for others to follow."

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Jim Weber has guided Brooks Sports from role of also ran to near the top of running-shoes world

Brooks Sports is about to enter its second century on the crest of a growth wave that CEO Jim Weber has guided by turning the company from "an also-ran, price-point brand" to a leading performance premium brand in what he refers to as a unique "class to mass to class" repositioning.


Weber, who was brought in as CEO in 2001 to turn around a troubled athletic-shoe company, took Brooks from a $60 million company to a running-shoes-only business that did $400 million last year and is now positioned, as number one among shoes sold by specialty running shops. And it's typically in the top three shoes worn by runners in major races across the U.S. and Europe.


Jim Weber
Jim Weber

The 53-year-old Weber, whose pre-Brooks background includes 12 years in consumer products with Pillsbury, Coleman and Sims Sports and a couple of years in investment banking, is now a finalist in


When Brooks moves late this year to a new Seattle headquarters in the funky Fremont District across the street from runners-dominated Burke-Gilman Trail, the 80,000-square-foot facility will house Brooks first-ever retail concept store.


Brooks has been a shoe company from its founding in Philadelphia in 1914, first as a maker of bathing shoes but soon moving into athletic shoes that were worn by football and baseball players in the '20s and '30s.


It continued as a mostly off-the-radar family-owned athletic shoe company for decades, before sinking into bankruptcy in the late 1970s and being bought by a series of owners who moved its home office first to Grand Rapids, MI, then to Bothell, northeast of Seattle.


The company experienced a business uptick in the '90s when Norwegian entrepreneurs Kjell Rokke and Bjorn Gilstein owned the company and brought in local CEO Helen Rockey. But the company got into financial trouble after Rokke and Gilstein sold Brooks to an investment-banking firm and Weber, who had been on the board for two years, was coaxed into taking the Brooks reins.


Russell Corp, acquired Brooks in 2004 and two years later, Berkshire Hathaway acquired Russell, down in the bowels of whose holdings was Brooks, which has since acquired a higher visibility in the Warren Buffet business empire.


"In running, we've taken an inclusive celebrate-running image, a 'run happy umbrella' that really creates a focus for us as a fitness company," Weber said. "In 12 years we've gone from 1 percent of the running-shoes market to third place."


"And we've done by what I think is a unique class-to-mass-to-class transition," he noted. "Brooks was a class running shoe that then was positioned to be a price-point brand and now is repositioned as basically the highest-priced premium running shoe."


As evidence of that, he points, in a Nordstrom-like explanation, to the average prices of the three tops running shoes as of early this year. Brooks' average price was $100.30, Asics' $91.20 and Nike $70.50


According to Leisure Trends, Brooks is Number One in the specialty running shoe channel in this country, with a market share of 29 percent, and number three overall. Weber notes, "the company is usually number two behind Asics in terms of which shoes runners are wearing at the 20 races we perform around the world."


"Shoes matter for competitive runners and we're one of the two top shoes in races, behind Asics," he added.


Weber says that while the focus on running "makes us a niche player, it's a niche we think can bring us to a $1.5 billion company. We're on track to reach half a billion this year."


I asked Weber if it seems a bit unusual for the head of a $400 million, century-old company, even having grown the business by 700 percent over the past decade, to be considered an entrepreneur. He replied:"What is an entrepreneur? Someone who brings unique solutions to problems that no one else has solved for a company."


In fact, Weber's comment about entrepreneurs could apply to several of the finalists in this year's Northwest EoY event who either guide large companies or have been around for an extended time. Those include bank CEOs Mark Mason of HomeStreet and Greg Seibly of Sterling, both of whom guided major turnarounds of their institutions, Expedia head Dana Khosrowshaki and four of the directors of Madrona Venture Group, the 18-year-old Seattle-based venture capital firm.


: Tom Alberg, Paul Goodrich, Gerald Grinstein and William Ruckelshaus are the Madrona directors up for honoring with Grinstein and Ruckelshaus once having served as the leaders of major national public companies.


When I asked Dan smith, managing partner of the Seattle office of Ernst & Young, which is in its 26th year with the EoY event in the Northwest, what defines an entrepreneur, he said "You have to stand back with an open pair of eyes and ask who is really making a difference. Who is taking companies to that next level?"



"They may not be starting a business, but the turnaround is almost like starting a business and takes the same entrepreneurial skills," he said. 

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Leslie Helm's book explores identity, culture conflicts in Japan-based family business

Leslie Helm, editor of Seattle Business magazine, has come to have almost a second calling as an on-the-road speaker to discuss his book, Yokohama Yankee, that explores his two identities, part American and part Japanese, and the impact the clash of those cultures has had on him and his family.


Helm was born and raised in Yokohama, where his German-born great grandfather came in 1869 to create what became a family-owned business that for much of the last century was the largest stevedoring company in Japan. His book chronicles the three generations of leadership of Helm Brothers and the constant conflict of cultural identity that faced him, his U.S.-born father and his grandfather, who was born in Japan but had American citizenship.


In recent weeks, Helm has had several speaking appearances in Seattle, as well as book signings, and a talk before the Japan-America Society of Southern California. Now he's preparing to head off to Japan in early June for two talks in Yokohama and, on June 10, the Foreign Correspondents Club in Tokyo.

Leslie Helm
Leslie Helm



The Foreign Correspondents Club appearance will likely bring back memories because Helm was one himself, working first as Tokyocorrespondent for Business Week in the mid-80s and in the '90s for the Los Angeles Times. It's likely his birth and upbringing in Japan before he headed to the U.S. for his higher education at U Cal Berkeley and Columbia might have made the idea of his being a "foreign" correspondent in Tokyo a bit amusing.


And his talk in Japan may also stir memories of what he recalls in the book, with obvious amusement, as the "frequent invitations to speak on Japanese television as Business Week's Tokyo correspondent. I was 26 and I would smugly discuss foreign affairs as if I were some pundit rather than just a curiosity-a white-faced journalist who happened to speak Japanese." His blond hair and fair complexion belie the fact he's one quarter Japanese.


The nature of the book, by a skilled writer weaving historical events, family successes and challenges and identity conflicts over more than 120 years leading up to his and his wife's decision to adopt Japanese children, is an intriguing look at what it's like to face cultural challenges in Japan.


It was about six weeks after attending his father's funeral in California in 1992, where he found himself gripped by the mix of anger and awe he had for his father, that Helm and his wife , having discovered they could not have biological children, decided to adopt two Japanese children, a girl and a boy.


Helm says he was "trying to go beyond a Japanese niche" in writing the book. "There are other aspects," he said. "It's a business study, a look at family business, and has some universal things like father-son relationship and adoption issues."


 As is frequently the case, there was serendipity in his great grandfather Julius's arrival in Japan. Having come to the U.S. from his native Germany, where he had been a trainer in the Prussian army, he headed for San Francisco to catch a boat to China. He missed that boat, but caught the next one to Yokohama.




With his Prussian army background, he first got a job as a War Lord advisor, Helm recalls, but soon perceived a business opportunity and in 1869 started a stevedoring business, inviting his brothers from Germany to join him in what soon became Helm Brothers.


"An astute businessman, he went public in 1899 and used the capital to buy up competitors," Helm said. "Eventually he had built the largest stevedoring company of its kind in Japan." And it's been suggested over the years that the family played a large part in building Yokohama into an international city


The ebb and flow of the company thereafter, through two wars and a massive earthquake, is compellingly chronicled, leading to the 1953 date when his father, Donald, only 90 days back from the U.S., was thrust into the role of head of the company. He was only 27, with no previous business experience, when his father decided suddenly to retire and move to Piedmont, CA, leaving his son to find his own way as the Helm at the helm.


What followed is detailed in what may make Helm's story far better fodder for a study on the challenges of maintaining a multi-generation family business then merely a look at the cultural challenges of being a successful foreign-owned business in Japan.


Over the next nearly 20 years, Donald Helm's challenges with the company saw him leave in anger to start a competitor, then be lured back by his relatives, for whom he conducted a precise accounting to determine the actual value of the company to pin down what it was worth to each.


"By 1973 there were just too many relatives who were shareholders to hold the company under family ownership, so what ensued that year was maybe the first hostile takeover in Japan as a Hong Kong company that had bought the shares of several family members forced the sale," Helm said.


Helm, who has been editor of Seattle Business magazine for four years after serving in the same role with the defunct Washington CEO magazine, has begun to accumulate accolades in addition to speaking invitations. He got a "starred" review in the June issue of Library Journal that circulates to 100,000 librarians. He told me the starred review is given to a relatively small selection of books each month.


And the book, now in its second printing, has been reviewed in Publisher's Weekly, the main journal for bookstores.


"I love that the Seattle Public Library bought 12 copies of my book and still has a queue of 79 people waiting to read it," Helm enthused.

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Long wait for SEC's crowd-funding rules stirs legislature to consider state-level measures

It's now been a year since Congress, with a bipartisan display remarkable for this politically dysfunctional era, passed the JOBS Act that was touted as a breakthrough for funding entrepreneurial start-ups and thus eventually creating jobs.


Well, the entrepreneurs are still waiting for the rules that would let them proceed to launch businesses by using internet websites to gather small amounts of money from large numbers of people online.


 The rules are to be written by the Securities and Exchange Commission where, despite repeated pressure from some members of Congress who really care about the issue rather than merely having voted for a JOBS bill in an election year, there's been no action.


But some states, including Washington, have decided they're tired of waiting and are seeking to proceed on their own. In fact, two bills that would allow Washington entrepreneurs to raise up to $1 million a year from Washington residents on the Internet have been filed in the state House of Representatives, one of the measure described as "democratizing venture capital."
And sponsors of the measures filed in this state say they are needed regardless of what kind of rules the SEC finally brings forth. The key sponsor of one of the bills, Rep. Cyrus Habib, D-Bellevue, frankly makes clear details of his bill (HB2023) are being worked on to groom the measure for serious consideration in the 2014 session.
Rep. cyrus habib
Rep. Cyrus Habib


The measure Congress passed last May was officially called the Jumpstart Our Business Startups (JOBS) Act by the clever bill drafters who attach can't-oppose names and acronyms to legislation to help ensure that balky lawmakers will find it difficult to vote against. Few lawmakers wanted to vote against JOBS in an election year.


Despite the congressionally mandated 180-day timeframe to the SEC, whose then-chair had large misgivings about the legislation, that time passed, as did a promised end-of-year date. Now the SEC has a new chairman, Mary Jo White, who has promised Congress she will make issuing the rules a priority.


If there's any doubt that there's a queuing up of entrepreneurs and those who would be involved in crowd funding, consider that the LinkedIn group "CrowdSourcing and CrowdFunding" has over 19,000 members.


Both supporters, who view the legislation as a major breakthrough for funding startups, and critics, who are convinced it's a funding disaster in the making, are awaiting the opportunity to be proven right once the rules allow the process to begin.

Tom simpson

Tom Simpson,

angel supporter


Tom Simpson, the long-time venture capitalist who now runs the Spokane Angel Alliance, thinks if the rules are "effectively drafted and supported, we would see large amounts of liquid capital flowing into emerging companies, in amounts even greater than during the pre-Sarbanes-Oxley, IPO glory days."


"Current regulations are chocking our nation's entrepreneurial fuel tanks," he added.


Bill Payne, generally regarded as the Dean of Angel Investors because of the role he plays in providing guidance to angel groups both in this country and internationally, sees a possibility that the regulations to be issues by the SEC "will be so restrictive that crowd funding will be viewed as not worth the effort."  


Bill Payne

   Bill Payne,

not a fan


Payne, who summers in Montana and winters in the Las Vegas area and who has launched four angel-investor groups around the West, has been a critic of the crowd-funding legislation from the outlet and says "I am less excited about crowd funding now than I was when it was passed."


"My guess is that entrepreneurs' advisors have suggested they seek angel capital instead of crowd funding," added Payne, who told me for a column I did a year ago that he viewed crowd funding "as a trainwreck waiting to happen" because he felt "a lot of investors will get scammed."


An issue that may further delay SEC action, and provide an added challenge for the internet masses to begin buying shares in companies via the Internet, is the potential sales tax liability in a crowd-funding project.


The U.S. Senate this week approved giving the 45 states that currently charge sales taxes the right to require large online retailers to collect tax on purchases made by their residents. The legislation must still clear the House, but political observers give it a good chance for passage and while it would only apply to online sellers that have sales of at least $1 million in states where they don't have physical operations, the SEC may decide to wait final determination on the bill.


Habib's bill would impose an excise tax of somewhere between 3 and 5 percent on investors, which Habib explains as necessary to cover costs the state would incur in things like more consumer protection for investors and added costs for state oversight of the crowd-funding activity.


"We can't go to the legislature in this financial environment ask for legislation to try something new and not cover the fiscal impact," habib added.


Rep. Frank Morris, D-Mount Vernon, who filed the other Washington state bill (HB2054)also a Democrat, said the state proposal is important regardless of SEC rules.

Rep. Frank Morris
Rep. Frank Morris


"The federal crowdfunding law, even once rules are in place, is going to require companies to work through an intermediary and is likely to have compliance costs that are cost-prohibitive for many start-ups," Morris said.


"The intent of the state legislation is to facilitate crowdfunding for Washington investors in Washington companies, with regulation that is protective of consumers, but less cost-prohibitive."


Bill Beatty, Securities Administrator for the state Department of Financial Institutions, points out that any offerings under state legislation would be "intrastate only, that is, limited to Washington Companies offering to Washington investors," adding such legislation at the state level doesn't require SEC approval.


Meanwhile, interest on the part of entrepreneurs and businesses that hope to be a part of the process continues to grow.


A business called Crowdfund Productions LLC is putting on Pro and Contra Conferences around the West, including one last week and Denver.



A Pro and Contra Conference is schedule for Seattle in September, by which time the SEC rules may be out, opening the door for a lot more pros and cons to be aimed by entrepreneurs and support groups.

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Builders' long-time CEO Anderson, who planned to retire at year end, told it's time to go now

When Sam Anderson accepted the job as CEO of the Master Buildings of King and Snohomish Counties 16 years ago, his key assignment was to change the image builders had with the community and the legislature of being confrontational and obstructionist.


So over the following decade and a half, Anderson turned the MBA into a respected organization that supported housing as well as environmental concerns, became a philanthropically visible entity and a political force, both locally and at the state level.


Anderson announced a few months ago that he would be retiring at the end of 2013, but in a dramatic turn of events Monday, the leadership of the organization that Anderson built into the nation's largest and most respected homebuilders organization told him they wanted to "make a change" now.


Anderson said he was advised by the five-member leadership group that includes the current and past president that his contract was being bought out and that, as he put it, "I was told it was time to move on."


Chief operating officer Rick Miller was named to serve as acting CEO while the association looks for a replacement for Anderson, which the leadership said would happen by the end of the year.


The only formal explanation for the action, which one longtime member said reflected underlying issues some members had with Anderson, was that the executive group felt it was time to make a change.


The formal release announcing Anderson's departure made a point of praising what he had achieved during his tenture as CEO.


"They told me they were giving me a good severance package and I told them, 'this is not about finances, it's about dignity, respect and appreciation.'"


So in a single meeting with the departing CEO, the organization's leadership may have made it more challenging for a new CEO who will have to overcome any community ill-will left by the manner of Anderson's departure.


The developments Monday followed an interview I had with Anderson last week that was designed to put in perspective his decade and a half with the organization whose image he remade in a way that has brought respect to the MBA. There was no sense at that interview that Anderson expected his departure to be imminent.


"When they hired me, they said, 'we are a black hat group; make us a white hat group," Anderson recalls of when he arrived to assume the role as head of the two-county builders group after a decade as general counsel and director of public policy for the National Ski Areas Association.


"Why should we be thought of as a black hat group since, as home builders, we provide a basic human need," Anderson recalls thinking.


Asked, during the interview last week at the homebuilders headquarters in Bellevue, what he views as his single biggest accomplishment, Anderson replied without hesitation: "Helping the organization become a highly respected corporate citizen."


In the years prior to Anderson's arrival, the negative image of the homebuilders' association was due largely to the fact that the image of the local group was tainted by the image of the statewide Building Industry Association of Washington (BIAW), which . found pleasure in an take-no-prisoners approach to dealing with governmental entities and lawmakers.


My first interview with Anderson was soon after his arrival in the late '90s and he made the point he was ready to do battle with the BIAW to make it clear to all that his organization's views were in no way represented by the statewide group, even exploring the possibility to dropping BIAW membership.


"I came with a sword in hand to conquer," Anderson said with a smile during our interview a few days ago.


"BIAW reflected horribly on our industry," he says now. "They were so far to the right that it was easy to make us look moderate," but he emphasizes that the relations between the state group and his association are now excellent.


In battling to create a new image for the group in the early years after his arrival, he positioned MBA as a homebuilders association that would work across party lines for the benefit of housing.


One of his first "white hat" steps was to create a Built Green focus for the builders in 2000, one of the earliest focuses on environmental concerns by any organization and led to national awards, and broad community recognition.


Then he conceived Master Builders Care Foundation that has allowed the organization to gain respect from an array of nonprofits and elected officials across the region.


An irony of Anderson's departure was that, in anticipation of transitioning the organization to new leadership in a changing environment, he oversaw implementation of a new governance structure, reducing the size of the board and streamlining the activities of the executive committee.


I asked Anderson in the week-ago interview what kind of person his successor would need to be.


"The new person will need to be the face of the MBA, one who will help to solve community problems and be considered by everyone to be a positive player," he replied, noting that he didn't expect to be part of the selection process.


It was the executive committee, in its first meeting under the new structure, that decided Anderson wouldn't even be around to meet his successor, whenever that person is selected.

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Nation-leading prostate-cancer research center in Seattle launches major private-funding effort

The Institute for Prostate Cancer Research (IPCR) has been largely unknown in its Seattle-area home despite the fact it's recognized nationally as being at the leading edge of efforts to solve the mysteries of prostate cancer. But this is the year when a concerted fund-raising initiative may dramatically boost the visibility of the Institute, and thus attract the private funding to enhance its ability to impact prostate cancer.


The 30-scientist collaborative effort by University of Washington Medical Center (UWMC) and Fred Hutchinson Cancer Research Center has made Seattle the nexus for prostate cancer research and care. And it could well be the place where a cure for the disease, if and when that comes about, is discovered.


If that sounds like a credibility stretch, in view of the lack of local awareness for the Institute, consider that dozens of peers nationally as well as pharmaceutical firms are beating a path to the door of the Institute seeking cooperation and partnerships.

Paul Lange
Dr. Paul Lange


Dr. Paul Lange, the UWMC surgeon and researcher who guided creation of the Institute and has helped oversee the nearly unique initiatives that have attracted national peer attention, says unabashedly: "Everyone in the world knows we're one of the best, except Seattle."


Evidence of that as fact rather than hyperbole may be that Dr. Peter Nelson, Oncologist at "The Hutch" who chairs the Institute's scientific steering committee, was wooed last fall by John's Hopkins, which described him as "the best in the nation," to head prostate cancer research there. But Nelson preferred to remain at The Hutch and be involved with the Institute's research.


Peter Nelson
Dr. Peter Nelson



A key Institute innovation that has attracted the attention of researchers not just nationally but internationally is called "rapid autopsy," a process in which cancer tissue that has metastasized is removed from the body of a deceased prostate victim with the same speed and precision as organs are removed for transplant.


The roughly 100 such autopsies that Lange's team has performed since the process was pioneered at IPCR, and which are conducted at only one other institution in the county, allow harvested cancer cells to be implanted in mice. Lange says about 15 percent of the implants take, becoming what are referred to thereafter as "tumor avatars," and producing thousands of samples.


Lange says "the cancer tissue has been very pivotal for many IPCR discoveries" and notes that the tissue has been shared with 50 other institutions to advance their own research, with the only requirement that they share the results of their research.


And now a group of prominent business and community leaders, most of them men who are prostate-cancer survivors, is mapping the first fund-raising initiative for the Institute. The group, called the Community Leaders Council, got their first report this week on the early results of efforts during the "quiet period" leading up to a key public event in December, a report that indicated the first $3 million of a $20.6 million goal has been pledged.


I asked Lange how he'd respond to those who wonder about the heavy focus on this private funding initiative when UWMC is among the top four or five institutions in terms of federal grants and funding.


"Government funding only supports a fraction of resources needed for constructing and maintaining a team such as ours," he replied. "For example much of the equipment, support of pilot projects, almost all of the substantial monies needed to develop the avatars, all of the funding for the rapid autopsy project was funded by private monies."


"All of the major prostate cancer groups, such as Harvard,Memorial Sloan-Kettering Cancer Center, John's Hopkins, University of Michigan have raised significantly more than we have because of the volume of private money. We cannot remain one of the top centers without more support."


The major December event for the fund-raising effort's coming-out party is the breakfast created by Steve Fleischmann, after his own prostatectomy 10 years ago, as the nation's first fund-raising event for prostate-cancer research, That first breakfast raised more than $700,000. It's now a biennial breakfast that has grown to attract hundreds of survivors and supporters.


Only prostate-cancer survivors are permitted to be table captains, so, as Fleischmann, founder and chairman of Fleischmann Office Interiors, jokes to associates and friends who ask to be table captains: "this is one event you don't want to be a table captain for."


Steve Hooper, founder of Bellevue-based early stage venture fund Ignition Partners and chair of the Council, says "the breakfasts let us expose the whole notion of prostate cancer to broader awareness."


"Men need to get to know their PSA as well as they know their golf score," says Hooper, who like Fleischmann was diagnosed with prostate cancer at age 47. Lange was surgeon for both Hooper and Fleischmann, as well as many of the other members of the Council.


Ironically, Lange's own prostate-cancer surgery was performed by Dr. William Ellis, whom Lange mentored and who became chief of staff of UW Medical Center, and is one of the most sought-after prostate-cancer surgeons at UWMC.


The five-year fund-raising effort has been named Act Smart and is broken into six components, each with a description, philanthropic support needed to carry out and a budget summary.


John Rudolf, president of Glacier Peak Capital and a member of the council, notes that prostate cancer "doesn't have an identifying pink ribbon to mark survivors and supporters, but people are starting to share their experiences as survivors and talk about the importance testing. There's a lot more open discussion about the disease."


Asked how close researchers are to finding a cure for prostate cancer, Lange, 72, replies with a chuckle: "I'm pretty sure it'll happen while I'm still cheering from the stands rather than after I'm pushing up daisies."

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Economic development interests bullish on growing financial-services sector

There's a growing conviction among economic-development groups in the Seattle area and Washington State that targeting the financial-services sector could bring dramatic and relatively quick returns for the local and state economy.


With the third annual Financial Services Summit taking shape for this summer, California's finance industry is clearly in the sights of many of those who are leading the charge and touting the fact that Washington State has neither a corporate nor a personal income tax.


The Economic Development Council of Seattle and King County has a list of industry clusters representing the key pillars of the region's economy and thus the key focuses for growth. Financial services is the newest industry on the list

and is attracting perhaps the most interest.


Jeff Marcell
Jeff Marcell

The fact that California didn't just shoot itself in the foot, but in the head, when it imposed a surcharge on the wealthy has raised the benefits bar on a concerted marketing effort aimed at financial firms. Several hedge funds have already moved from the Bay Area to Seattle and that surcharge is seen as the "moving" force.



The EDC, which has returned to the name it had for more than 30 years prior to being rebranded as EnterpriseSeattle early last decade, held the first summit on that industry sector in May 2011. That gathering dealt with the value of targeting financial firms and showed that Washington State ranks fifth in the nation as a hub for the financial-services industry. The six subsectors the study identified within the financial services cluster include things like banking, accounting, credit and lending.



Scott Jarvis
Scott Jarvis


But the excitement about potential rapid growth is focused on the financial-services subsector. And California's finance industry is the most prominent target for many, though there's a bit of "in-bad-taste" reluctance to talk about specifically targeting California's businesses.


David Allen, McKinstry Co. executive vice president and chair of the EDC, agrees the financial-services sector could well provide the quickest and most lucrative returns, if the state's benefits are marketed well.



Karl Ege, a Seattle attorney at Perkins Coie who served for a time as vice chair of Russell Investments and is heading the Regulatory Task Force, is unabashed about touting the state's tax benefits.




"Why shouldn't we go after 21st Century high-paying jobs for educated people?' Ege asked in an e-mail exchange with me. "Financial services encourages a bigger business base, creates good jobs and their money comes from assets they manage around the world. And really this state's advantage, for high-margin businesses, is that we have no income tax."




Washington is one of only seven states without a business or corporate income tax and the only others in the West are Nevada and Alaska.


In addition, the service sector (law, accounting and financial activity) is exempted from the state sales tax, though the 1995 Legislature punished the service-sector businesses for battling against imposition of the sales tax by hammering those businesses with the highest business & occupation tax rate. The B&O tax rate for service firms is 1.8 percent of gross revenue, three times higher than the next highest industry and almost seven times higher than the lowest B&O rate.


Jeff Marcell, president and CEO of the EDC, says "one reason we feel it's so important to target this industry is that it yields unbelievable results for the community in terms of fantastic wages and international connections."


"Thanks to technology, more and more financial services companies are enjoying the freedom to base operations where it best suits their needs," Marcell added. "And Seattle/King County is increasingly becoming a hub of major financial players who want their headquarters far from the negativity conjured up by Wall Street."


I asked Scott Jarvis, recently reappointed by Gov. Jay Inslee as director of thestate's Department of Financial Institutions, if he viewed the financial-services sector as potentially the biggest reward among the target sectors.


"I don't know how to define 'the biggest reward,' but I certainly agree that the logistics of a move by one of those firms are relatively simple and the ability to be up and running, literally over a weekend, takes much uncertainly and 'down time' out of the decision to relocate," he replied.


And Jarvis is significantly involved in shaping the strategy for financial-services firms, including working with Ege's group to modernize Washington's trust laws, an effort which he explains is "to make them more relevant, modern and attractive to business."



"Currently, our trust laws are in the same chapter as our banking laws and have not been significantly amended in many years, Jarvis added. "We plan to work during the


interim with interested parties to separate out the trust law elements while at the same time ensuring that the elements needed for effective consumer protection remain and are modernized to address current and even future improper practices."


"Scott Jarvis been amazing," Marcell replied when I asked about the involvement of the state agency involved with overseeing financial institutions. "It's striking to see a regulator work so collaboratively about growing the industry cluster. He's an ace up our sleeves when we are competing for business."




"DFI has worked hard to foster a regulatory environment that is attractive and responsive to, and supportive of, financial entities while aggressively protecting consumers from improper or illegal behaviors," Jarvis replied when I asked about his department's involvement. "Those two activities are not mutually exclusive. Reduced to its essentials, we assist the good guys who want to play by the rules and go after the bad guys."

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Five years and 260 columns later, "Flynn's Harp" marks important milestone for its author

Hard for me to believe it's been five years ago this month since, with some apprehension, I launched this column and sent it off unsolicited to about 500 unsuspecting contacts in my email database, hoping those original recipients wouldn't tag me as SPAM. They didn't, so 260 weekly columns have now flowed out and another 900 folks have let me add their names.


It was in April of 2008, almost exactly two years after my retirement from the Business Journal, where as publisher I wrote weekly columns or editorials, that I realized I missed writing and communicating. So I explored with friends the idea of doing a column and distributing it via e-mail or Internet blog, but what to call the column?


That was resolved pretty quickly as I shared a glass of wine and discussed the idea with a Spokane friend who almost instantly said: "You need to call it 'Flynn's Harp.'"


"The harp is a beautiful Irish instrument," she enthused. "And the name will allow your Irish to come out, whether just explaining ideas or 'harping' about things that bother you."


I had already been reflecting on the fact that election year 2008 was the 40th anniversary of the tumultuous 1968 presidential campaign that I had been fortunate enough, as a young political writer for UPI, to be immersed in. It was the '68 in which four Washington citizens had prominent roles, starting with then Gov. Dan Evans, who keynoted the Republican National Convention.


So I debuted "The Harp" with four successive columns, following Evans' with one on Jim Whittaker, the Everest conqueror who was a key figure in Sen. Robert Kennedy's ill-fated presidential campaign. Next was Egil Krogh, a young Seattle attorney who would become Richard Nixon's White House counsel, then Kitty Kelly, a friend from Spokane whose role as press assistant for Sen. Eugene McCarthy's quixotic presidential-race would launch her career as a controversial biographer.


Unfortunately, the four columns, which led to my moderating panels with Evans, Whittaker and Krogh before a couple of business groups, are lost somewhere beyond the Cloud. But a portion of the reflection on that campaign is contained in one I did a year ago (Flynn's Harp: Some positives in long political campaigns).


Finding the original material to bring readers information they didn't already have has been satisfying. But even more so have been the responses, some moving, some laudatory, some critical, from many of the now-1,400 or so who receive the column each Wednesday evening.


I'm sometimes asked by people who are being exposed to the column for the first time, What do you write about?" to which I respond: "I write about whatever strikes my interest."


I once called my son, Michael, to ask "Do you think it would seem strange if I wrote about Gonzaga football?" and he replied: "Since people don't pay you for it, write about whatever you want." So I did (Flynn's Harp: When football was king at Gonzaga).


The column that perhaps most tugged at my heartstrings was one I did first in 2010 after learning about it from my friend, Spokane magazine editor Blythe Thimsen. It's the until-then untold story of the unusual North Pole Fantasy Flight that Alaska Airlines creates for disadvantaged kids in the Spokane area (Flynn's Harp: Alaska fantasy flight to the North Pole).


The love affair of a man and his car is a timeless story and recurring theme. So the column that resulted from memories of my youthful romance with a '55 T-Bird ranks atop my favorites.


It began: "As summer gives way to autumn, longings for the long ago can creep into the days for the sentimental among us and so it is that I sometimes find myself revisiting the days of youth when, somewhere between girlfriends, I fell in love with a '55 Thunderbird." (Flynn's Harp: a youthful love affair with a '55 T-Bird).


My family was much aware of the role the T-Bird had in my memories so on a birthday sometime in the late '90s, my son gave me a copy of Marc Cohn's "Silver Thunderbird." I played the tape constantly on a business trip until I knew the words and could sing along as I drove.


I closed the column with the admission that "growing older had brought the slow realization that the longing that stirred occasionally wasn't just about a car, it was also about a time. "I could own a T-Bird again, but I couldn't drive it back. My wife and family understood that a long time ago."


The T-Bird column sparked several responses from readers who'd had one. But the most memorable was from Joe Galloway, a long-ago UPI colleague who was likely the best correspondent of the Vietnam War and whose book, "We Were Soldiers Once..and Young," later became a movie. He's kind enough to let my weekly email in, and after this one, he emailed back:


"Ah Mike. I somehow knew we were blood brothers. My second car in this life was, yep, a 1955 white Thunderbird with soft and hard tops. I was just 19, working my first newspaper job at the Victoria TX advocate... not long after that I was hired by UPI for the Kansas City bureau and I loaded the T-Bird up with all my earthly possessions in the trunk and passenger seat and headed north. It was Jan. 1961 and the No. 1 song blaring on the radio was Wilburt Harrison's Goin' To Kansas City! I howled right along with him.Those were the days, my friend, we thought they'd never end......"



Galloway, in fact, has been quoted in several pieces I've done on wars and veterans of wars, columns that have always been the most satisfying because of their focus. AndThe column on Galloway reflecting on what was, in reality, the decisive battle of the Vietnam war, five years before the American people were told the war was unwinnable, stands out for me.



The column that sparked perhaps the most touching responses was one I did on my mom, reflecting five years after her death in 2004 on the fact she was a "boys' mom" through and through (Flynn's Harp: Reflecting on column on boys' mom five years on). She impacted a lot of young men, including her three sons, in Spokane's St. Aloysius neighborhood where she helped guide them all on the road to manhood.


I wrote: "She was pretty hard-nosed about teaching us to be the best we could be. Thus, on occasions in my early years, when I'd come home crying from being struck or harassed by neighborhood kids, she'd march me back to the scene and force me to have a proper fistfight with the offending kid. I can't remember ever losing one of those mom-spurred fistfights."


I noted that "Even from the perspective of more than six decades, I still view that 'battlefield education' by my mother as a remarkable, perhaps even unique, chapter in my early development. And many who have heard the story have remarked cryptically: 'That explains a lot, Flynn.'"


With the idea of perhaps doing a book at some point on "Memorable Notes from Flynn's Harp." I've divided the now-260 columns into groups of topics, including personal, sports, politics, interesting people.


And a topic that has become one of my more informative is angel investing (search Flynn's Harp: Angel Investing, and a group of columns comes up). Part of the satisfaction is that writing on that topic has allowed me to get to know "angel" leaders from Montana to California and write about things important to entrepreneurs that never get much general media coverage because angels don't go seeking coverage.




The weekly columns have perhaps been of more value to me in the doing than to the business and media people and elected officials who permit me into their mailbox each Wednesday evening. So to those of you who frequently, or even occasionally, open the email to view the column: "See" you next Wednesday. 

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Retirement not on Fahey's radar as First Sound Bank turnaround opens growth opportunities

After a frustrating failure to save Frontier Bank, veteran banker Patrick Fahey's relief at his successful turnaround of Seattle-based First Sound Bank has him focused on "having some fun now" running the newly healthy bank rather than retiring for the fourth time.


Fahey, whose career running banks began in 1981 when he was named president and chief operating officer of what was then Spokane-based Old National Bank, completed his 15-month-long turnaround effort at First Sound by paying back its TARP debt to the Fed last month.

pat fahey
Pat Fahey


Fahey had been a consultant to First Sound, after the Fed fouled up an infusion of capital that would have saved Everett-based Frontier Financial Corp. Then the First Sound board asked him in January 2012 to take over as CEO, the third time a bank board had tapped him to un-retire.


When he took over, First Sound was, as he describes it now, "one of the most troubled banks in the state," viewed by the Fed as "significantly undercapitalized." It was under a Fed cloud, required to raise at least $7 million as a condition of paying off its outstanding TARP shares and making a healthy exit from Fed oversight.


"It's pretty tough to be in the position we were in," Fahey recalled in an interview looking back to the time he stepped
in, and forward to what comes now. "People seeking loans don't want to anticipate the FDIC as a partner in their loan."


But as a result of Fahey's turnaround efforts, including quest for capital, the bank last month closed an offering that raised nearly $8 million, from which it paid the Treasury Department $3.7 million for its $7.4 million in outstanding Tarp shares, a 50 per cent discount. It thus extinguished all its warrants and unpaid dividends.


Fahey says the raise and satisfying the Fed with the TARP payback have turned First Sound into "one of the healthier banks in the state" and its funding infusion means its capital ratios will now exceed the regulatory definition of a "well-capitalized" bank.


Those who know Fahey and his history of relative retirement as board member of various banks, only to be summonedback to full-time involvement with what inevitably were troubled banks, have assumed successful turnaround would guide him back to retirement.


So I asked Fahey the inevitable retirement question, having followed him since he left U.S. Bank in 1987 to launch Pacific Northwest Bank.


"Actually the fun begins now," he replied. "We've now literally tripled our legal lending limits so we can make larger loans. This gives us a cushion against shock waves in the economy and decreases the risk for the bank.


"Our new business won't necessarily come by upside in the economy, it will come by taking business from the larger banks and we'll do that by being more responsive to small businesses, who need an answer now, even if it's a 'no,'" Fahey said.


"But it will still be a great opportunity to participate in the recovery by providing financing to businesses that need to grow," he added.


The success with First Sound, although Fahey emphasizes the next step is profitability, is a welcome outcome for Fahey after the frustration of Frontier's seizure by the Fed and sale to Union Bank.


A board member at Frontier, he was asked in 2008 to assume the position of CEO at what was, at the time, the largest bank based in Washington (Washington Mutual having already been seized and tossed to Chase). He brought the turnaround effort to the point of a planned private-equity infusion of $430 million that had been committed, pending Federal Reserve approval.


But the Fed dithered and the private-equity people decided they could do better elsewhere and rescinded the offer, forcing the closure of Frontier and the acquisition a couple of days later by Union Bank in a regulatory-assisted transaction in 2010.


The Frontier experience didn't sit well with Fahey, who had built Pacific Northwest Bank into the largest commercial bank headquartered in the Northwest (that was a few years prior to WAMU's growth spiral up and its death spiral down.


He sold PNWB to Intrawest and went on the board of theOak Harbor-based bank, only to be summoned from the relative retirement of board work to take over as CEO and turn Intrawest around, which he did as he put the PNWB name on Intrawest and then guided it into an acquisition by Wells Fargo.


Wells Fargo kept Fahey on board to build its business-banking role, which he did as chairman of Washington Regional Banking at Wells, a position from which he retired in 2004 and was soon asked to join the board of Frontier. That was basically retirement again, but not for long, as he called me in 2008 to say "I flunked retirement again."


So what's the outlook now for lending, as Fahey sees it?


"I still think there is the possibility of a boom and bust cycle in apartment construction," he said. "I would think that banks doing that kind of lending would prudently tighten equity and secondary repayment source requirements. Just drive through Ballard."


And he remains a critic of the impact the regulatory environment is having on lending.


"The Dodd-Frank legislation and resultant regulation and bureaucracy make it very difficult for a small bank to risk making residential mortgage loans, and ultimately passes the cost of compliance with these regulations on to the consumer," Fahey said.



" Many of the regulations implementing Dodd-Frank have yet to be written despite thousands of pages that are already out," he added.

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Booth Gardner spurred creation of nation's first comprehensive treatment center for Parkinson's

It was in Booth Gardner's post-political career, after Parkinson's Disease had begun to take its inevitable toll on him, that he teamed with another former Washington governor whose own brother had the disease to help create the nation's first comprehensive treatment center for Parkinson's.


Gardner's many contributions, from his leadership as two-term governor to his high-visibility support of the Death with Dignity Initiative, are being recalled in the wake of his death last week that ended his long struggle with Parkinson's.


But those who benefitted from the name, horsepower and personal leadership he brought to creation of the Booth Gardner Parkinson's Care Center at Evergreen Hospital may well regard that as perhaps his most important contribution.


This column is focused on the signal impact Gardner had in what amounted to an important victory for him in his struggle with the neurological disorder that leads to progressive difficulties with movement and coordination, and eventually cost him his life.


Gardner was part of the remarkable intersection of individuals impacted by Parkinson's who came together in 2000 as a fledgling initiative took shape to create a specialized treatment center for Parkinson's Disease in the Seattle area.


Craig Howard, whose step-mother had Parkinson's, recalls that as he and Bill Bell, whose mother also had the disease, began working with Evergreen to create a special treatment center for Parkinson's, they learned about Gardner being similarly afflicted.


It was Bell, nephew of former Gov. Dan Evans and his wife, Nancy, who had originally envisioned a Parkinson's treatment center after enduring the frustration of the fact "specialists were few and far between and scattered around the country" as he sought help for his mother.


"The idea of creating a multi-disciplinary clinic, where patients could be treated in a more holistic way, by a team, led by specialist seemed to resonate with people," said Bell, who approached Howard about joining in the effort.


Bell and Howard had already enlisted Evans, whose brother had the disease, and his wife, Nancy, as initial board members of the then-new Northwest Parkinson's Foundation, when Evans suggested to Howard "contact Booth Gardner because he also has Parkinson's"


"During the visit, after I tracked him down at his office in the Norton Building, it was obvious that he was being grossly under-treated for his symptoms and he agreed to make an appointment with the only specialist in town at the time," Howard recalls.


"Three weeks later, Booth called and asked why nobody knew there were actual neurologists that are fellowship trained in Parkinson's," Howard said. "He was back woodworking, playing with the grandchildren and feeling back in the game."


"He commented on the fact that with all the resources available to him, he still hadn't known there were specialists," Howard added. "His concern was for all those diagnosed that didn't have the resources he had and wouldn't learn that

that there's an opportunity to feel better. He asked how he could help. I asked if we could use his name for the new Center. He said, 'That would be great because everyone else just asks for money.'"

Booth at 25th
Booth Gardner being interviewed at Business Journal 25th Anniversary party, with Mike Lowry, another former governor

In addition to lending his name to the new Center, Gardner became the first board chair for the Northwest Parkinson's Foundation and was a constant advocate for specialized care and PD awareness.


Gardner and Evans, despite both being former governors, hadn't known each other very well, but soon became fast friends with their shared focus on the Parkinson's care cause.


Nancy Evans once joked to me, "If the phone rings at 7:30 a.m., we know it's either one of the kids or Booth."


It was because of my wife, Betsy's, Parkinson's that we came to know Gardner and, whenever we met at a Parkinson's event, he always came up and gave Betsy a hug and he and I would visit about how he was feeling.


His legendary sense of humor extended even to his disease as, when he was interviewed at the Puget Sound Business Journal's 25th anniversary event, he quipped: "I told my doctor I wanted to live to see 70. So now that I've made that, I called him and said, 'okay, I want to see 80.'"


"As founders, each of those board members seeded the organization generously," Howard said. "NWPF and Evergreen pushed the Center into the black in just over 24 months, but most importantly showed other hospitals in the region they needed specialized movement-disorders care."


"Puget Sound is now one of the best places to live well with Parkinson's, with at least eight specialized physicians where there were none before," Howard added.


"The Booth Gardner Center, as the first in the country focused solely on treatment, proved to be the model for the nation," Howard said. "And this area remains the epicenter of Parkinson's treatment."


Summing up Gardner's contribution, Howard described him as "an alchemist of human potential" in energizing people to produce their best. "Booth had a magical effect based on the possibilities."

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Prominent Latino friends target healthy slice of growing U.S. mezcal market

A retired Seattle baseball hero and two successful entrepreneur friends, all of Latino heritage, are embarked on an effort to bring Mexico's most popular mezcal spirit to successful penetration of the U.S., and possibly other parts of the world where the cousin of tequila might find a market.


It was five years ago that Mike Sotelo, a Seattle businessman with deep roots in the Latino communities around the state, formed La Plaza International LLC with exclusive U.S. and world rights to El Zacatecano and sought out Gene Juarez and Edgar Martinez as partners.


Gene Juarez

Juarez, who grew up poor in the Yakima Valley but went on to establish the Northwest's best-known chain of hair salons that still bears his name, and Martinez, whose career with the Seattle Mariners likely destines him for baseball's Hall of Fame, quickly decided to come aboard.


So did Greg Brown, managing director of the Caprock Group, a wealth management firm, whom Sotelo sought out as a partner who brought both money and financial expertise to the business.

"Mike brought in a money guy, a marketer and a celebrity," says Spencer Kunath, whom Sotelo and Juarez brought aboard as the key executive to oversee the business operations and growth of the company.


Mike Sotelo
Mike Sotelo

Juarez and Martinez, who have already had substantial financial success in their professional lives, seem less intent on making a fortune in the mezcal business than they do on raising the fortunes of the 400 or so residents of Huitzila, where El Zacatecano has been made for almost 100 years. The spirit gets its name from Zacatecas, the state in which the town is located.


Mezcal is the older but less-known brother of tequila. But sales of the two in the U.S. in recent years suggest Mezcal, which was actually created by the conquistadors whose experimenting with the maguey plant to find a fermented mash resulted in the first mezcal, is overtaking tequila, the national liquor of Mexico.


Edgar Martinez
Although mezcal's share of the agave spirits market (tequila and mezcal) is only 5 percent, sales of mezcal are growing four times as rapidly as tequila sales and have a compound annual growth rate of 42 percent over the past three years, according to figures from the U.S. International trade Commission.


El Zacatecano is fermented from the Highland Weber Blue Agave plants that stretch beyond Huitzila and have been harvested for almost 100 years by the family with which Sotelo and his team have an agreement.


The El Zacatecano distillery is the largest employer in
Huitzila , which lies in the foothills of the Sierra Madre mountains, about 10 miles northeast of Jalisco state but 141 kilometers, or two and a half hours, by rough road and Mexico 23, to Guadalajara.


In an interview, the three principals agreed that their objective is to "support the organic and sustainable economic development of Huitzila by focusing on employment growth. We want people to have good quality and regular jobs to support their families," said Juarez.


I asked the three if tourism might become a residual benefit for Huitzila in the event they are as successful developing the brand as they hope.


"Not with 75 miles of dirt road to get to the town," Sotelo replied.


In addition, Kunath noted the name of the product is about to change.


"We are migrating our brand over from El Zacatecano to ZAC," he said. "The bottles currently say El Zacatecano but that will be changing next month. It is a slow process. We don't want to do it instantly as we could risk losing loyal customers."


Asked to explain the reason for the change, Kunath quipped: "We want our customers who are downing their third shot to still be able to pronounce the name of their mezcal."


This isn't the first business venture for Sotelo and Juarez. Sotelo was the founder-organizer of Plaza Bank, with the goal of creating a lender whose focus would be on "enhancing the opportunity for Latino entrepreneurs in the state to find funding."


A year after its founding in 2007, the bank, on which Juarez served as a board member, ran into the economic storm that impacted a host of small banks in Washington and across the country.


Kunath says the effort to expand current ZAC distribution on the West Coast will soon expand to Texas, Arizona and Nevada, He adds that they are "close to securing distribution in Korea, Japan and the Emirates Group in the Middle East and North Africa. We have tantalizing opportunities in front of us."
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Legislation would get tough on illegal use of disabled parking permits

Proposed legislation that would set the stage for imposing tough new penalties on those who "steal" city parking spots by illegally using parking permits issued to disabled drivers is increasingly likely to be approved by the 2013 Legislature.


The bill, HB1946, would create a "work group" composed of representatives of the State Department of Health, local governments and disabled-citizen advocacy groups to produce a strategy designed to curb the "tremendous amount of abuse" of the disabled- parking placards.



Disabled citizens are entitled to park at not only parking spaces reserved for the handicapped, but also in city-operated paid-parking spaces without charge. Seattle officials estimated, for a column I did on this topic two years ago, that 40 percent of downtown and First Hill parking spaces are occupied by vehicles displaying handicapped-parking placards.


Seattle City Councilman Tim Burgess, now a mayoral candidate, told me for that 2011 column that the city's police department and state transportation people "estimate that as many as 50 percent of the placards are being illegally used," representing 20 percent of the parking spots in the downtown area.


The measure before the 2013 Legislature made it out of the House Transportation Committee last Friday and now awaits referral to the full House for a vote and, if approved by the representatives, will then go to the State Senate.


Toby Olson, executive secretary of the Governor's Committee on Disability Issues and Employment, says the filing of the bill, sponsored by Olympia's two house members, both Democrats, followed nearly a year of meetings with Seattle officials. The goal was to find solutions to reduce the abuse of disability parking placards while strengthening enforcement for violations.


Once approved by both houses and signed by the governor, the bill would immediately require handicapped parking placards to prominently display an expiration date. Using an expired permit would result in a $250 fine.


The second phase of the bill would establish the work group, whose goal would be to add more far-reaching provisions. That group would begin meeting in August and deliver its final strategic plan to the 2014 Legislature.


"There is no shortage of ideas for the work group to consider," says Olson "But there are consequences to some of the ideas. They'll need to come up with ideas that are actually workable and take cognizance of state budget constraints."


The bill makes some specific recommendations to the work group and an interesting one is to explore the extent to which medical professionals, who must certify the disability of those seeking a permit card and auto placard, are aiding the abuse.


The bill would require that the strategic plan include "oversight measures" to ensure that parking placards and special license plates for the disabled are being properly issued.


The strategic plan would provide for a random review by a volunteer panel of medical professionals of placard issuance and possible sanctions against medical professionals for repeated improper issuance of disabled parking placards


The Seattle Police Department says that many physicians distribute parking placards "for reasons that may not comply with state criteria" and a key suggestion is adding the name of the issuing physician on each placard.


A Seattle resident who ran across my previous column on the Internet sent me an email some months ago saying he did a test with his own doctor following knee surgery from which he explained he was "now walking without discomfort."


"I asked my doctor if I could get one of those permits for disability parking. She smiled wryly and said 'well..hmmmm...I suppose you qualify'. WHAT! I can walk without trouble and it is that easy to get a permit for phantom knee pain that was corrected months ago?"


Of course, blaming the disabled-parking abuses mostly on doctors would be unfair in an environment where use of other people's permits or using the placards of those who are now deceased is suspected of being rampant, driven in part probably from the ever-increasing cost of parking.


And while the City of Seattle is looking to the legislature to devise ways to address the abuse, which also brings lost revenue for the cities, some tools are already available.


One is the use of trained volunteers authorized to issue citations for infractions, which was approved by previous legislation in this state some years ago.


In cities elsewhere in the country, trained volunteers are authorized to issue citations for infractions. The Seattle Commission for People With Disabilities, in a report
 on the problem a year ago, suggested the volunteers could record the license plate numbers of cars displaying expired placards, or operated by drivers who didn't appear to be disabled.


Some Seattle officials expressed concern that such use of volunteers might lead to confrontations with offending parkers.


To which I suggested to one such concerned official that use of volunteers who were large as well as intimidating in appearance would likely take care of the concern.


For sure the representatives of the disabled and the city agree increased enforcement and imposition of harsher penalties are essential, particularly for those caught using a placard issued to someone who has since died.



The issue of stealing handicapped-parking spots, which is of course what cheaters are doing since they are depriving cities of revenue in addition to depriving handicapped drivers of parking places, deserves the attention it's apparently finally going to get from the Legislature.

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